OREGON STATE UNIVERSITY

Important 2009 tax tips for Oregonians from OSU experts

02/15/2010

CORVALLIS, Ore. – If you haven’t already filed your taxes – and let’s face it, a lot of us wait until the last minute – there are changes this year to the state and federal tax codes that Oregon State University experts say Oregonians should know about.

Roger Graham, professor of accounting, and Jared Moore, the Mary Ellen Phillips Assistant Professor of Accounting, are both members of OSU’s award-winning accounting program in the College of Business. OSU accounting students have surpassed the national average on the Certified Public Accounting Exam for the last five years and have won national accounting competitions.

Moore and Graham offered these four tips for taxpayers and business owners to be aware of when filling out their 2009 state taxes.

Tip No. 1. The sales-based sliding scale for the corporate minimum tax applies only to C-corporations. Moore said some business owners might be confused about their tax status after the passage of Measures 66 and 67. “This means that it does not apply to partnerships, LLCs, LLPs, or S-corporations,” Moore said. “These entities do have a minimum tax, but it is $150 (generally) regardless of the level of sales.”

For more information, go to http://www.oregon.gov/DOR/BUS/corp_tax_changes_2009.shtml

Tip No. 2. Depreciation rules for Oregon do not follow the federal rules for 2009. Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of most business property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of such property as buildings, machinery, vehicles, furniture and equipment.

According to Moore, an Oregon business that purchased depreciable assets during 2009 will likely have to compute a different depreciation deduction amount for its Oregon return relative to its federal return. Oregon did not adopt the bonus depreciation provision or the increased expensing limits under IRC Section 179 that were adopted at the federal level after Dec. 31, 2008. Oregon businesses should use the amounts allowed under 2008 federal law, without the extension provisions of the federal stimulus act, to compute the Oregon depreciation deduction.

For basic information on depreciation rules, go to

http://www.oregon.gov/sites/DOR/PERTAX/2009_pit_changes.page

Tip No. 3. According to Graham, to encourage car purchases, the federal return allows people to deduct sales tax on the 2009 purchase of a new vehicle – a provision within 2009 federal stimulus legislation.  The deduction is available whether or not you itemize deductions on Schedule A. Because states like Oregon do not have a sales tax, a deduction is still allowed in states without sales taxes for the new car fees (such as registration fees with the Dept. of Motor Vehicles) paid on a 2009 purchase of a new car. Graham said taxpayers can itemize the car fees on Schedule A. “Even if you do not itemize, you can use the fees to increase your standard deduction by using Form L,” Graham said.

Tip No. 4. Certain cash contributions for Haiti relief can be deducted. Graham said a new law allows deduction of certain charitable contributions of money on the 2009 tax return instead of your 2010 return. The contributions must have been made after January 11, 2010, and before March 1, 2010, for the relief of victims in areas affected by the recent earthquake in Haiti. The new law was enacted after the 2009 forms had already been printed. When preparing your 2009 returns, you may complete the forms as if these contributions were made on Dec. 31, 2009, instead of in 2010. He said to deduct your charitable contributions, you must itemize deductions on Schedule A (Form 1040) or Schedule A (Form 1040NR).